Clinton Administration Releases its FY 2000 Budget Proposal

$70 Million Increase Sought for Mental Health Block Grant

As is being widely reported in the press, President Clinton yesterday unveiled his proposed $1.77 trillion budget for FY 2000. The overall plan projects a $129.5 billion surplus for the coming fiscal year and proposes large spending increases for education, defense and child care. The President’s budget also proposes to set aside 62% of the projected surplus over the next 15 years to preserve Social Security. For discretionary programs, the budget stays under the mandated ceiling of $537.2 billion, in part by shifting some spending and policy initiatives to the entitlement side of the budget. For programs of concern to NAMI, the President’s budget includes a small increase for research, new increases for services programs, a small cut in housing programs and endorsement of the Jeffords-Kennedy-Roth-Moynihan Work Incentives Improvement Act. Included below is an analysis of the President’s FY 2000 budget.

1. Research

The President’s budget proposes a $20.5 million increase for the National Institute of Mental Health (NIMH) -- up from its current level of $855.5 million to $876 million. This marks nearly a 2.4% increase over the current level, slightly above the average proposed increase across the 13 agencies within the National Institutes of Health (NIH). Overall, the Clinton Administration is proposing nearly $16 billion for the NIH, slightly more than a 2% increase. However, this proposed increase is substantially below the increases that Congress approved for NIH in the current year’s budget (15%). Already, advocates for biomedical research in Congress are criticizing the President’s budget as inadequate, and are pledging to continue the bipartisan effort to double the NIH budget over the next five years.

2. Services

For the first time in the Clinton presidency, the Administration’s budget proposal is seeking an increase for the Mental Health Block Grant program. Specifically, the President’s budget proposes to increase the Block Grant by $70 million. This 24% increase, which Congress must approve, would boost the program’s current level of $288 million, up to $358 million. The Mental Health Block Grant directs federal funds to state and local service programs on the basis of a specified formula. The program is a small, but important, source of funds for state mental health agencies that pass funds through to local treatment service programs such as CMHCs (Community Mental Health Centers) and county mental health agencies.

NAMI is supporting this proposed increase in the block grant and will be seeking a requirement that all additional funds be targeted to persons with severe mental illness. Specifically, NAMI will be asking Congress to direct the federal Center for Mental Health Services (CMHS) to require states to use new increases for the Block Grant for evidence-based programs such as assertive community treatment (PACT), with an explicit directive that service dollars be tracked in terms of the persons served.

The President’s budget also proposes to increase funding for the PATH program (homeless persons with mental illness) by $5 million, up to $31 million. All other programs within CMHS, part of the Substance Abuse and Mental Health Services Administration (SAMHSA), would be frozen, including PAIMI – protection and advocacy ($23 million), Childrens’ Mental Health Services ($78 million), Knowledge Development and Application – KDA Demonstrations ($58 million) and the CMHS school violence prevention initiative ($40 million).

3. Housing

The President’s budget proposes a $2.5 billion increase for the overall HUD budget, up to $28 billion for FY 2000. Unfortunately, few of these new resources would be directed toward adults with severe mental illnesses under the Administration’s plan. Instead, the proposed budget seeks to continue the recent trend toward shifting authority over how federal housing resources are spent to the local level.

Under the President’s budget, funding for the Section 811 program (funding for group homes that serve adults with disabilities) would be frozen at $194 million. In addition, HUD is also proposing to double the amount of the portion of 811 funding that is currently diverted to tenant-based rental assistance, away from capital advances to non-profits and project-based rental assistance (the traditional form of 811 funding). This proposal has the potential of all but eliminating new federal investment in the development of congregate housing serving adults with severe mental illnesses.

The President’s budget also proposes to eliminate an initiative on the part of Congress to fund tenant-based assistance for adults with disabilities (including people with severe mental illnesses) who have lost, and will in the future lose, access to housing as a result of designation of assisted and public housing as "elderly only." In the last three years, Congress has appropriated over $130 million for this purpose. The President’s budget does propose a substantial increase for new "incremental" Section 8 rental vouchers -- $243 million for 42,000 vouchers for persons experiencing "worst case housing needs" and $104 million for 18,000 vouchers for homeless persons.

However, HUD did not include any recommendation for targeting these resources to low-income or homeless adults with severe mental illnesses (either adults who are currently homeless, residing in temporary transitional housing or moving into the community from a state hospital). Thus, HUD’s proposal would leave local governments with full discretion over how to spend these funds. The Administration’s HUD budget proposes to increase funding for Homeless Assistance Grants ("Continuum of Care") by $45 million, up to $1.02 billion. This includes programs such as Shelter Plus Care, Emergency Shelter Grants, Section 8 Moderate Rehab and Single Room Occupancy.

4. Policy Initiatives

As with all White House budget proposals, this year’s plan includes an array of policy initiatives that have fiscal implications. For example, the budget includes funding for a new initiative at the Health Care Financing Administration (HCFA) designed to crack down on fraud and abuse in the Medicare partial hospitalization program. The specific plan would bar providers from furnishing partial hospitalization services in a beneficiary’s home or other residential setting, allow HHS to establish more stringent standards for CMHCs and impose civil monetary penalties for when a physician falsely certifies the need for partial hospitalization services.

Finally, the President’s budget endorses the Jeffords-Kennedy-Roth-Moynihan Work Incentives Improvement Act. This legislation would reform Social Security’s disability programs by removing many of the penalties faced by SSI and SSDI recipients who go to work (most prominently the threat of losing eligibility for Medicare and Medicaid). The budget sets aside over $1.2 billion to cover the estimated cost of the bill.

A hearing before the Senate Finance Committee is set for February 4 (NAMI will be offering testimony on the importance of this legislation for adults with severe mental illnesses and their families). A bipartisan group of House members are planning to introduce the bill in the coming days. S 331 is now posted on the policy page of the NAMI website, http://www2.nami.org/. NAMI advocates are urged to thank their senators who agreed to cosponsor the bill and contact all other senators to gain their support.